DETROIT (Reuters) -- Shares of Ford Motor Co. touched a three-year low on Friday and U.S. option markets priced in more risk for the struggling auto sector after supplier Dana Corp. filed for bankruptcy.

Ford, General Motors and the Chrysler group accounted for 46 percent of Dana's revenue in 2004, according the latest data available. Of that total, Ford accounted for 25 percent and GM for 11 percent.

"Ford is working closely with Dana to ensure there are no disruptions in the supply of parts to Ford facilities," a Ford spokesman said.

Ford shares closed down 9 cents, or 1.2 percent, to $7.57 on the New York Stock Exchange, after touching an intraday low of $7.39. That was the lowest point for the shares, which have fallen almost 11 percent over two weeks, since March 2003.

Shares of DaimlerChrysler closed off $1.26, or 2.3 percent, to $54.40, while GM shares slid 20 cents, or 1 percent to end official trading at $19.21.

"There is likely a greater concern about further bankruptcies in the industry," Standard and Poor's equity analyst Efraim Levy said. "The more common bankruptcies at auto suppliers become, the increased perception that one of the automakers might go that route."

The Dana bankruptcy filing also rippled through the equity derivative market, pushing volatility higher and driving investors to hedge holdings in the sector.

"Option investors are seeking puts to protect their downside exposure to their long stock holdings in Ford, General Motors, and American Axle & Manufacturing," said Paul Foster, chief strategist at Web information site theflyonthewall.com.

On Friday, a total of 20,007 calls and 31,698 puts traded in Ford in the U.S. options market, far outpacing its average daily volume of 15,445 contracts, according to market research firm Track Data.

There was an even more bearish bias in American Axle with 2,287 calls traded against 16,145 puts. Shares in American Axle ticked higher, gaining 8 cents to $15.50 on the New York Stock Exchange.

Investors often use puts -- which gives the right to sell the underlying stock at a preset price within a specified time period -- to protect against downside risk for their portfolios.

In GM, a total of 28,877 calls and 58,520 puts had changed hands across the U.S. option exchanges.

"Put activity in Ford and General Motors has increased this week, given the uncertainty of the future of Dana Corp," said Al Thompson, options trader at Timber Hill, a division of Interactive Brokers Group.

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